GSM Test 1 Questions & Answers 2024/2025
What are the elements of a good strategy? - ANSWERS-Analysis: Diagnosis of the competitive challenge. Both internal and external environments
-Formulation: Guiding Policy to address the competitive challenge resulting in the firm's corporate, busines...
What are the elements of a good strategy? - ANSWERS-Analysis: Diagnosis of the competitive challenge.
Both internal and external environments
-Formulation: Guiding Policy to address the competitive challenge resulting in the firm's corporate,
business, and functional strategies
-Implementation: A set of coherent actions to implement the firm's guiding policy. Accomplished
through strategy implementation.
How is competitive advantage different from competitive parity? - ANSWERSCompetitive advantage is
superior performance relative to other competition in the same industry. Competitive parity is the
performance of two or more firms at the same level.
How can a firm gain and sustain competitive advantage? - ANSWERSStake out a unique position within
an industry to provide value to customers, while controlling costs. The greater the difference between
value and cost, the more likely it will gain a competitive advantage. Performing differing activities or
performing the same activities different than your rivals.
What are some of the sources of a firm's competitive advantage? - ANSWERSBrand popularity
High volume production
Access to Capital
Corporate Reputation
Strong research and innovation
Strategic Assets
Barriers to Entry
Superior Product
Speed and Time
, Exclusive Distribution Rights
Flexibility
Low Pricing
Why is it important for firms in the same industry to choose distinct strategic positions? - ANSWERSSo
the firm can provide value to their customers while controlling costs. Even if two firms compete in the
same industry, both can win if they have a distinct and well-executed competitive strategy. You can
provide value to customers in different ways (lower prices or better service or better selection).
Discuss the major hallmarks described in Chapter 1 of what strategy is NOT. - ANSWERS-Grandiose
Statements("our strategy is to win" "we will be number 1")
-Failure to Face A Competitive Challenge (Blockbuster), managers must know whether they are making
progress in addressing the challenge
-Operational Effectiveness, competitive benchmarking, or other tactical tools. These support competitive
strategy, but are not sufficient to sustain it
What are the factors that determine firm performance? - ANSWERSIndustry Effects and Firm Effects
What is the relationship between firm effects and industry effects? - ANSWERS-Industry Effects: Describe
the underlying economic structure of the industry. Determined by elements common to all industries.
Ex: Entry and exit barriers, number and size of companies, types of products and services offered
-Firm Effects: Firm performance is attributed to managerial actions
-20% depends on industry effects
-55% depends on the firm's strategy
Provide examples of a firm's internal and external stakeholders. - ANSWERSInternal: stockholders,
employees, board members
How can effective stakeholder management benefit firm performance? - ANSWERS1. Cooperation and
information availability
2. Lowered costs
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